haddon90

would it be possible that AS acquires the routes and sells off the planes?

channa

Right. Which is exactly why AS doesn't want to let that happen.

eponymous_coward

Why on earth would you do that? Two gates at DAL and a handful of LGA/DAL/DCA/JFK slots are not worth billions of dollars. Every other airport involved, if AS wanted to start SFO-FLL service today, they could do it, without having to spend billions of dollars buying VX.

eponymous_coward

I don't think a bicoastal network is all that. There's a lot of people you're ignoring in "flyover country" if your network is Florida, New York, Boston and California, plus a very small (limited to two gates) focus city in Dallas.

channa

That would be possible, and it's been done before (Southwest-Airtran).

But they would need planes to fly the new routes. And unless they could get more quickly, it wouldn't make sense to dump the Airbus equipment.

While SEA has ties to Boeing (and that could play into the SEA loyalty factor), the Airbus equipment rates well from customers (it's wider, so seats are wider), and the VX equipment has better amenities (TVs, IFE), and looks more modern and fresh with the purple lights and such.

From a customer satisfaction perspective, it would be a negative for them to dump the VX planes and replace them with lower quality AS-like equipment.

AS may also figure out that having Airbus in its back pocket gives them more leverage with Boeing. If Boeing thinks they're not a sure thing for future orders, they may get more aggressive with pricing in order to win the business.

Major G

An interesting thought would be for AS to use the VX planes for high-value routes such as Hawaii-Mainland and SFO-NYC for the better FC which people are more likely to pay for. Other routes continue to use the existing Boeings. Of course that would mean making a second maintenance hub at SFO (or the Bay Area).

A key benefit of this merger would make AS too big to swallow for the majors and finally end that speculation.

Scottrick

They have three West Coast hubs at SEA, PDX, and LAX, not including ANC. Also, the fleet would be a complete departure from Alaska's history as a "proud" all-Boeing carrier. It's not that no one saw it coming. It just doesn't make a lot of sense.

But it could have strategic value if they prevent another carrier from getting bigger, or if it prevents them from getting acquired. I have never been very concerned about the latter. Alaska is still very profitable, has never gone bankrupt, and is happy on its own.

lg20

Does VX own or lease most of their planes? That could factor into it.

Either way, to go all 737, you still need 60 planes to magically appear if you dump the Aribii.

lg20

They may be forced into making an offer, just to avoid letting B6 get dramatically bigger.

Technically, VX is profitable, so they could just keep it going as a wholly owned subsidiary. Maybe a super regional?

Split the routes, QX = under 500, AS 500-2000, VX 2000+ miles? Then you can have different service offerings depending on the stage lengths, but still technically keep fleet commonality?

eponymous_coward

Hawaii-Mainland is not a high value route. If it was, you'd see p.s./AA three-class/Delta One equipment on SFO/LAX-HNL just like SFO/LAX-EWR/JFK.

The reason why AS is so successful at West Coast-Hawaii is Hawaii is NOT a high-value destination (compared to places like NYC), which makes it easier for a "lean and mean" LCC to extract value from it.

VX has pretty low-density Airbii (some of them are A319s, which have less seats (119) than AS 73Gs (124) that AS loves so much that they want to convert them to freighters). That probably hurts AS revenue to lose a bunch of Y seats by turning routes like SEA-DCA, SEA-PHL or SEA-CHS over to a low-density A319/A320 that won't really save them much on costs (plus it means they have to fly a bunch of extra weight as IFE). I don't know if you could make it up by trying to sell an enhanced F cabin (that elites could no longer upgrade or upfare to without buying F). SEA isn't SFO/LAX/NYC.

Chugach

Huh...interesting. Agree with others this is more about not letting B6 get them.

channa

AS is too expensive to be bought, and has been so for a while. Their market cap is about half of United's.

Nobody's going to buy AS for $10 billion + a premium if UA is worth only $20 billion.


AS is also facing unprecedented exposure with DL at SEA. Yes, they're holding their own and doing well, but who knows how long that will last or continue. If the economics of SEA change dramatically, DL has bigger pockets to hold out longer and harm AS. AS needs some insurance to protect against that, if that becomes reality.

Chugach

VX tried SFO-ANC already and couldn't get out fast enough. AS hasn't flown it in years, if not decades, which tells me a lot as they've added ANC-LAS/PHX plus grown ANC-LAX but not ANC-SFO. Combined with the massive international growth at SEA, it's not a route they (AS) really need.

UA flies it in the summer and winter holiday periods, but they also have a global hub on one end.

Major G

Scott, I think you are putting too much stock in an all Boeing fleet. It does reduce maintenance costs, but many airlines operate multiple manufacturer fleets. And acquisitions are more about the routes than the assets. Alaska may be profitable, but good luck defending a hostile takeover bid, which of course, is up to the stockholders, not the management.

V/r, Glenn

Quintious

Meh, I don't really see any benefit to this from a consumer standpoint (and since I don't own AS stock, that's all I really have to care about). AS's two biggest problems, to me, have always been a lack of East-to-West synergy (i.e. no East coast hub) and a lack of international travel that is only slightly mitigated by partnerships w/ international carriers that are oftentimes difficult to book award travel on due to the 330 day timeline.

This solves neither of those issues. The only potential positive here is the addition of some Airbus planes, which I feel are significantly better than 737's.